Question

Copper Conduit, Inc., and Dependable Electric Company sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti-mate but approximately $1,000." This is​:

Answer 1

Answer:

A liquidated damages clause

Explanation:

A liquidated damages clause or provision is included in an agreement specifying an amount of money that establishes the damages that will be recovered by one party in the event of another party's breach to the contract.

Liquidated damages are agreed upon by parties to the contract at the time of signing the agreement.

In this scenario, the provision of $1,000 in the agreement constitutes a liquidated damages clause.